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The Katanning Gold Project (“KGP”) lies within the under-explored Katanning Greenstone Belt in the South-West Archaean Yilgarn Craton in Western Australia (Figure 1). Gold mineralisation at the KGP occurs broadly aswell-defined stacked lodes described as orogenic-shear-hosted deposits that have undergone post mineralisation deformation. Associated gold remobilisation has resulted in formation of pipe-like structures of elevated grade.
Ausgold continues to utilise its extensive database and innovative exploration modelling to identify and refine fresh exploration targets as well as re-evaluating of historic targets and prospects as part of near-mine and regional exploration efforts. This exploration effort combined with the detailed Resource Modelling conducted as part of the recent scoping study has renewed interest in and highlighted the prospectivity and relative exploration immaturity of the Katanning Region and its potential to host significant gold mineralisation.
Ausgold’s aim in the short term is to quickly add ounces to accelerate mine development as envisaged in the recent Scoping Study completed in November 2015 and in the medium term deliver new mineral resources to provide longevity to the mining operation.
Figure 1.Location of Ausgold’s (AUC) Katanning Gold Project (KGP) in the Yilgarn.
Gold mineralisation was discovered in the Katanning region by Otter Exploration in 1979, and since that time several other companies have conducted exploration programmes. Open cut mining operations occurred at Jinkas (Figure 2) and Dingo (Figure 3) from 1995 until 1997, with a reported production of 20,000 oz at an average head grade of approximately 2.4 g/t. Ausgold acquired the mining tenements that cover the deposits in 2011, and has conducted a number of resource delineation drilling programmes, with the most recent in 2015.
The KGP is situated approximately 260km southeast of Perth and 35km east-north east of Katanning within the Great Southern Region of Western Australia (Figure 4).The site is accessed by sealed highway with sealed and high-grade gravel roads service the surrounding region. Access to the various prospects and site office is good and is generally by way of sealed roads, well maintained gravel roads and tracks and farm tracks.
Gold mineralisation at Dingo and Jinkas deposits, and in the Lone Tree, Jackson and Olympia is hosted by medium- to coarse-grained mafic gneisses that represent Archaean greenstones metamorphosed to granulite facies (Figure 5). The greenstones are intruded by sheet-like monzo-granite sheets.
In open pit exposures and drill core the host sequence displays a strong gneissic layering that dips at 30-45 degrees toward the ENE (local grid east). Previous exploration models had focused on this pervasive layering and gold mineralisation was interpreted as comfortable with the gneissic banding. However, a study and 3D modelling in 2014 by SRK (Greentree, 2014) and subsequent modelling by Ausgold, revealed a new structural and mineralisation model, summarised as follows:
At least two corridors of mineralisation have been definedby two NNW (local grid north) trending quartz-monzogranite sills that form the footwall to mineralisation. Gold mineralisation also occurs in the footwall, below the upper quartz-monzogranite sill, and above a second lower quartz-monzogranite sill (approximately 120m thick). This mineralization occurs within the gneissic package, between the two quartz-monzogranite sills and is referred to as the White Dam, Lone Tree, and Jackson prospects (Figure 5).
At Dingo a single quartz-monzogranite sill has been defined and is approximately 120m thick. Gold mineralisation is hosted within the mafic gneiss in the hanging wall, above the contact with the quartz-monzogranite. Mineralisation in the KGP area is also cut by a number of east and northeast striking Proterozoic dolerite dykes that post-date mineralisation and granulite metamorphism.
Gold occurs predominantly as free gold associated with disseminated pyrrhotite and magnetite, lesser pyrite and chalcopyrite and traces of molybdenite. Vein quartz is rare but the highest-grade parts of the deposits feature thin, dismembered, remnant quartz veins. Two styles of mineralisation have been recognised:
As a result of advances in recent advances in understanding of the geology and management’s commitment to realising the viability of the KGP, Ausgold engaged industry specialists SRK Consultants Ltd (“SRK”) to complete an updated Mineral Resource estimate (Table 1; Resource Statements and ASX Announcement 21/10/2015).
The updated resources comprise the Jinkas, Dingo, Jackson, Lone Tree and White Dam mineralisation, which extends over a 5.0 kilometre strike length of favourable stratigraphy at the KGP (Figure 5).
Notes: The Mineral Resource is reported at a lower cut-off grade of 0.50g/t gold.
For the Jinkas Main Lodes, a top cut of 50g/t has been applied (with top-cuts of 15g/t and 20g/t applied for the Jinkas HW Lodes). For the Dingo Main Lode a top cut of 20g/t has been applied.
The topographic surface at the KGP is at approximately 360mRL with the updated Mineral Resource estimate stated to a depth of 210mRL (approximately 150 metres below land surface).
The KGP Resource represents a geologically well-defined zone of low to medium grade gold mineralisation. The mineralised domains show variation in thickness along strike; however the drill density has allowed delineation of geometrically coherent and predictable mineralised lodes (Figure 6; interpreted mineralised lodes).
Figure 6. (A) Interpreted Lodes in the Jinkas Area and (B) Interpreted lodes in the Dingo Area.
Individual Resources (Jinkas, Dingo, Jackson, Lone Tree and White Dam) appear to have good potential for economic extraction by modest scale open pit mining (in the form of pit cut backs and new pits) as part of a centralised mining operation. Some potential exists for underground mining at Jinkas where coherent high grade shoots are defined.
Figure 7. Jinkas Footwall Domain Resource Block Model showing selected Whittle Pit design (see “Scoping Study”)
Figure 8. Jinkas Drill Hole Plan and Cross Sections 18660mN and 18720mN (local mine grid)
Figure 9. Jinkas and White Dam Cross Section 18240mN
Figure 10 - Pit Design based on selected Whittle Pit Optimisation at Jinkas
Figure 11- Pit Design based on selected Whittle Pit Optimisation at Dingo
The preliminary open pit designs also provide estimates of total material movement and strip ratios for the selected pit shells. The total KGP material movement over LOM is 23.6Mt for a LOM strip ratio (SR) of 5.5. On this basis Ausgold has made estimates of C1 cash costs (Table 4).With average KGP C1 cash costs of $928/oz (average SR at 5.5)
The location of the proposed treatment plant will be at the existing plant site adjacent to and south of the proposed Jinkas open pit. This should allow the existing TSF, ROM pad, haulage roads and process plant bulk earthwork levels to be utilised as much as possible.
Figure 12 – Process Flow Diagram for KGP
The KGP development will require further investment in a range of infrastructure items including upgrade of the existing tailings storage facility (TSF), ROM loading area and haulage roads. Ausgold has allocated $13m of capital to these items (inclusive of the pre-strip of waste).
Figure 13. Regional map showing selected new targets, anomalous geophysical responses, geochemical anomalism and potentially anomalous geochemical trends.
Figure 14.White Dam Resource Development project showing 3D view of Mineral Resource Model, drill hole pierce points into the White Dam model (black dots), planned priority 1 drilling and interpreted extension of potential high grade shoot.